Successful construction businesses aren’t run on hunches but rather on data-informed decisions.
Data can be used to help construction business owners make critical, insightful decisions on:
With the advancement of technology, data collection has become a more common practice for construction companies. Studies show that data collection within the construction industry has doubled in just the last three years.
Mike Baldicana, owner of TrekRoofing shared the following, “The way data is used by construction companies has changed over time. In the past, they used to rely on manual methods of data collection and analysis, but with the help of technology, it has become more efficient and cost effective.”
So, how do successful construction companies utilize data to make informed decisions about their businesses? We interviewed construction company owners to get answers straight from the horse’s mouth.
Record keeping is key in any successful construction business.
Construction companies, like other businesses, must gather a great deal of data throughout the course of their work,” shared Benjamin Stenson, owner of Norsemen Home Remodeling, “Businesses, for example, have to keep track of their supplies so that more can be obtained when needed, as well as their accounts with their suppliers so that cash can be paid out on time. In addition to payrolls, progress reports, and even technical specifics for their building projects, there are many more instances of data that may be assessed.”
Gone are the days of endless excel sheets and paper trails. Research shows that 79% of construction companies use software to capture data and keep records instead of using manual applications.
Stenson added, “New data solutions have simplified and reduced the time and effort needed to keep track of all of these operations, allowing construction businesses to put that time and effort to greater use on the job site. These same tools have also made it much easier to combine raw data into useful formats, increasing usability and enhancing communication within the company.”
Reese Freemen, the owner of Steamboat Springs Construction Co., shared how he uses data to forecast costs associated with construction projects.
“Based on my experience in the industry, I have noticed that many local contractors do not use data in their line of work,” shared Freemen. And he’s not wrong. 95% of all data captured in the construction industry is never utilized.
“I decided to go off on my own for this very reason and employ data analysis as a way to strengthen my services and build a niche in the market,” said Freemen. “As an example, I developed a database that made it easy for me to locate the pricing of a particular subcontractor. Over each project, I can compare how the price changed even just over six months. That way, I can forecast the momentum of the trend and provide a better estimation of where particular costs may be at the time of purchase.
Freeman shared how tracking this data has helped him accurately project expenses:
“This helps mitigate the risks involved with client expectations when entering into a construction contract because we have data to back the changes in the market. For many clients, it is hard to believe that prices have escalated by 30% in my area over the past six months, but we have the data to back it.”
Robin Anthill, owner of Leisure Buildings, had this to say about dealing with disputes:
“If you work in construction, you've almost certainly had a tense disagreement with a supplier or partner that produced problems or delays in your project, making your job much more difficult. As building projects get more complex, such scenarios might develop at the wrong times, resulting in weeks or months of legal disputes. This is one of the most inefficient ways of wasting time and money.”
Anthill shared how data collection has helped him set the record straight when it comes to resolving disputes and claims, “Data can be the unbiased judge of such disagreements with the help of building software, reducing the time and resources spent trying to resolve them. There are various products on the market that provide this feature and can operate as an evidence log of everything that happens on-site, reducing the danger of a future dispute significantly.
Data can be incredibly valuable when it comes to project scheduling. Data can help paint an accurate picture of when certain work activities should start and approximately how long it should take to complete a specific project.
Freeman shared how he used data to schedule construction projects:
“For each project, a detailed project calendar is created which we use to baseline the project's timeline and begin organizing when we need the client to make decisions so we can purchase materials on time. As lead times change and contractors are stretched thin, Steamboat Springs Construction Co. stands out as a contractor who can provide our trade partners with accurate data on when they are scheduled to start and how much time they have to get ready. It helps everyone out when people can plan their business with some reasonable accuracy and planning using the data and monitor it frequently for changes.”
Employee retention has been a long-standing problem in the construction industry that has only continued to grow. According to Associated Builders and Contractors, the industry will face a shortage of 650,000 workers in 2022.
Now more than ever, employee retention is essential. Data collection can be used to help construction business owners make informed decisions that can help retain their workforce.
Freeman shared, “As it becomes more and more difficult to find trade workers in the industry, there is a greater need for staying ahead of keeping employees engaged and compensated. Routine feedback of performance goes both ways for the employee and employer, and working to achieve the goals established on paper in a bi-annual feedback session is imperative to be taken seriously as a company and employee who cares,” Freeman added, “We use that data to hold ourselves accountable and monitor our progress towards organizational goals and growing employee satisfaction. People seem to take a liking to how relaxed yet calculated this process is.”
The Flexbase Card offers 10x the credit limit than traditional credit cards, 0% APR for the first 60 days, cash-back rewards, and more.
Click here to learn more and pre-qualify for the Flexbase Card today.